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The “Impact Pathway Approach” – so called, “ExternE Methodology” to Estimate Impacts and External Costs. Application in North Africa Methodology, Limits, Exemplary Results Philipp PREISS IER, Universität Stuttgart Presentation Outline Aim of Methodology Basic principles - Impact Pathway Approach – Part 1: Quantification of Impacts Impacts Included Basic principles - Impact Pathway Approach – Part 2: Quantification of Costs Assessment of Climate Change Example Results – Uncertainty – Range of Results Applications of the Results Summary Aim of the ExternE methodology: helps to take into account all externalities in a consistent way when making decisions - Investment decisions - Technology Assessment (subsidies, research support) - Consumer decisions (e.g. by adjusting prices, by internalisation of external costs) - Cost-benefit analyses, esp. for environmental and health regulation - Green accounting Basic principles 1) Pressures, (e.g. emissions of substances to environmental media) have to be estimated 2) Assessment of effects/impacts (e.g. health risk), of the pressures (e.g. emissions of pollutants) relation between pressure and impact is in general not linear and impacts depend on time and site of pressure “Bottom-up approach” needed for the complex pathways: the ‘Impact Pathway Approach’ (IPA) Impact Pathway Approach – Part 1 Differences of Physical Impacts Physical Impacts Pollutant / Noise Emission Transport and Chemical Transformation Calculation is made twice: with and without project! Background Concentration of Prim. PM2.5 [µg/m3] Additional Emission of 1000 t PPM2.5 in Egypt Delta Conc. of PPM2.5 [µg/m3] Population Distribution Population*Delta Conc. Accumulated Exposure Quantification of Impacts and Costs relation between pressure and impact Concentration Response Function (CRF): Example: Additional Years of Life Lost = 6.5 · 10-5 · Dconc. PPM2.5 ·Population Number of Years of Life Lost [YOLL] due to 1000 ton emission of fine dust PPM2.5 in Egypt in Egypt = 748 in the Northern Hemisphere = 53 in Western Europe < 0.5 YOLL Years of Life Lost due to 1000 t PPM2.5 Impacts Included (I) Impact Cat. Human Health mortality Human Health morbidity Pollutant / Burden PM10 : PM2.5, PMco SO2, O3 Benzene, BaP, 1,3butad., Diesel part., radioact.,HM Noise Accident risk PM10, O3, SO2 Effects Reduction in life expectancy due to short and long time exposure Reduction in life expectancy due to short time exposure Reduction in life expectancy due to long time exposure PM10, O3 PM10, CO Benzene, BaP, 1,3butad., Diesel part.,radioact. PM10 Restricted activity days Congestive heart failure Cancer risk (non-fatal) O3 Noise Mercury Accident risk Reduction in life expectancy due to long time exposure Fatality risk from traffic and workplace accidents Respiratory hospital admissions Cerebrovascular hospital admissions, cases of chronic bronchitis, cases of chronic cough in children, cough in asthmatics, lower respiratory symptoms Asthma attacks, symptom days Myocardial infarction, angina pectoris, hypertension, sleep disturbance Loss of IQ of children Risk of injuries from traffic and workplace accidents Impacts Included (II) Impact Cat. Building Material Crops Global Warming Pollutant / Burden Effects SO2, Acid Ageing of galvanised steel, limestone, mortar, sanddeposition stone, paint, rendering, and zinc for utilitarian buildings Combustion particles Soiling of buildings SO2 Yield change for wheat, barley, rye, oats, potato, sugar beet O3 Yield change for wheat, barley, rye, oats, potato, rice, tobacco, sunflower seed Acid deposition Increased need for liming N, S Fertilising effects CO2, CH4, N2O World-wide effects on mortality, morbidity, coastal impacts, agriculture, energy demand, and economic impacts due to temperature change and sea level rise Amenity losses Noise Amenity losses due to noise exposure Ecosystems Eutrophication, Acidification Land Use Change SO2, NOx, NH3 ‘PDF’ of species Impact Pathway Approach – Part 1 Pollutant/Noise Emission Differences of Physical Impacts Transport and Chemical Transformation Calculation is made twice: with and without project! Basic Approach of NEEDS/ExternE Assessment of impacts is based on the (measured) preferences of the affected and well-informed population Basic principles - Impact Pathway Approach – Part 2: Quantification of Costs Preferences are expressed, and effects are transformed into monetary units: - allows transfer of values, - units are conceivable, - direct use of results in CBA and for internalising via taxes possible. (…however, e.g. ‘utility points’ would give the same ranking). Impact Pathway Approach – Part 2 Pollutant/Noise Emission Differences of Physical Impacts Transport and Chemical Transformation Calculation is made twice: with and without project! Monetary Valuation Monetary Valuation Health end-points Increased mortality risk (infants) New cases of chronic bronchitis Increased mortality risk - YOLLacute Life expectancy reduction - YOLLchronic Respiratory hospital admissions Cardiac hospital admissions Work loss days (WLD) netto Restricted activity days (netRADs) Minor restricted activity days (MRAD) Lower respiratory symptoms LRS excluding cough Cough days Medication use / bronchodilator use Euro per case / per YOLL 3,000,000 200,000 60,000 40,000 2,000 2,000 295 130 38 38 38 38 1 Quantification of Costs Concentration Response Function: Additional Years of Life Lost = 6.5 · 10-5 · Dconc. PPM2.5 · Population Quantified number of additional Years of Life Lost due to one year operation : 748 YOLL Monetary value: 40000 Euro2005 per Year of Life Lost Damage costs per year: 748 YOLL * 40000 Euro per YOLL = 29.2 Million Euro2005 Valuation methods for non-market goods Revealed Preference behaviour (shown in the past) Stated Preference surveys Indirect valuation Direct valuation assesses costs or efforts that can be linked to the nonmarket good • Hedonic Price Method • Averting Behavior Method • Travel Cost Method • Contingent Behavior Method • Past behaviour of public decision makers • Contingent Valuation Method (CVM) • Attribute Based Choice Modeling (ABCM) • Participatory approaches • Surveys for preferences of public decision makers Assessment of Climate Change I. Marginal Damage Costs Includes the following categories: • agriculture • forestry • sea level rise • cardiovascular and respiratory disorders related to cold and heat stress • malaria • dengue fever • schistosomiasis • diarrhoea • energy consumption • water resources and • unmanaged ecosystems • Time horizon till 2300 Assessment of Climate Change I. Marginal Damage Costs "Average, 1% trimmed“, "1% PRTP“ , “World Average Equity Weighting” Euro per ton CO2 25 Damage costs CO2 €2005 20 15 10 5 0 2005 2015 2025 2035 Year of emission 2045 Assessment of Climate Change II. Marginal Avoidance Costs "500 ppm CO2 “, “technological progress“ , “certificates-emission dealing” Euro per ton CO2 60 External costs CO2 - €2005 50 40 30 20 10 0 2005 2015 2025 2035 Year of emission 2045 Some exemplary results of applying the ExternE tools EcoSenseWeb The results of the ExternE research are the functions and tools that can be applied to answer individual questions! Results of applying the tools depend on scenario, site, time and technology! Possibly important effects that are not (yet) included: • Visual intrusion • Biodiversity loss (local, however included in Environmental Impact Study) • Risk of nuclear proliferation and terrorism • Risk aversion resp. treatment of Damocles risks Quantified External Costs [Euro-Cent / kWh] of a Coal Fired Power Station (steam turbine) 3 NMVOC PM10 NOx 2 SO2 CO2eq 1 um Be lg i an ce Fr an y G er m la nd Po UK Ita ly ai n 0 Sp [Euro-Cent / kWh] 4 External Costs of Different Technologies [Euro-Cent / kWh] External costs [Euro-Cent / kWh] 19 Euro/t CO2, YOLLchronic = 40000 Euro 6 5 Sites in Germany; 2010 technologies! 4 3 2 1 0 WEC Offshore Hydro Health impacts PWR, reproc PV sc-Si Crops Natural gas-CC ORCHKW Material PAFC Lignite, IGCC Coal, IGCC Coal PFB Climate change External Costs [Euro-Cent / kWh] 6 5 4 3 2 1 0 WEC Offshore Hydro Health impacts PWR, reproc PV sc-Si Natural gas-CC Crops ORCHKW Material PAFC Lignite, IGCC Coal, IGCC Coal PFB Climate change External Costs [Euro-Cent / kWh] External Costs of Power Stations [Euro-Cent / kWh] Assuming 50 Euro/t CO2 6 5 4 3 2 1 0 WEC Offshore Hydro Health impacts PWR, reproc PV sc-Si Crops Natural gas-CC ORCHKW Material PAFC Lignite, IGCC Coal, IGCC Coal PFB Climate change Quantification of Externalities of Heat Supply CB=condensing boiler, MFH=multi family house, OFM=one family house External Costs [Euro / GJ] 4 3 2 1 0 Gas-CB OFH Solar-Gas-CB OFH Health Gas-CB MFH others Fuel oil-LT MFH GHG Wood chips MFH External Costs [Euro / ton] of Emission 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Egypt Libya Tunisia Algeria Morocco EU27 Netherlands NH3 NOX PPMco PPM25 SO2 Norway [Euro per ton] Results Europe Results North Africa Applications of the IPA/ExternE Results European Union: Energy: justification for promoting and subsidizing renewable energy; recommended cap on subsidies for renewables Transport: cost-benefit analysis mandatory for all major infrastructure projects; planned to levy tolls according to infrastructure and external costs Environmental Protection: Cost-benefit analysis for all recently implemented directives for Air Pollution Control: e.g. Non-Hazardeous Waste Incineration Directive, Large Combustion Plant Directive, National Emissions Ceilings Directive, Daughter Directives to Air Quality Directive: ozone, CO and benzene UN: cost-benefit analysis for the UN/ECE multi-pollutant multi-effect protocol Summary • The ExternE methodology estimates effects of technologies for energy conversion and assesses them based on preferences of the effected population for a large number of impact pathways. • The methodology is already widely used for decision aid in the fields of energy conversion, transport and environmental protection. • Gaps and uncertainties exist, however will be more and more reduced due to ongoing research (e.g. on dispersion models for Africa, pathways involving toxic substances, heavy metals, biodiversity, water and soil contamination…) • More information ExternE: www.ExternE.info • Tool EcoSenseWeb: www.EcoSenseWeb.ier.uni-stuttgart.de